Ford Motor Company’s $500 million investment into U.S. electric vehicle startup Rivian Automotive LLC follows on a similarly big investment from Amazon.com Inc. into the Plymouth, Michigan based startup (which was to the tune of $700 million). Both companies are seeking to develop electric vehicles on the higher-end of the market and to challenge Tesla.
Ford has pledged $11 billion to develop its electric vehicle portfolio. This includes plans for a battery-powered version of its popular F-150 pick-up and an electric crossover, which is based on its Mustang sports car.
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These current projects do not form part of the Rivian deal, according to The Daily Telegraph. It is understood Ford intends to deploy Rivian’s “skateboard” chassis, which is comprised of batteries, motors and a drive system, as the basis for a new vehicle. Details of this new car have not been revealed, but it appears to be on the higher end of the market as a rival to Tesla’s fleet.
Ford President Joe Hinrichs said: “There’s a lot we can learn from Rivian’s clean sheet approach.”
Who is Rivian Automotive?
Rivian was formed in 2009 and the company specializes in developing vehicles, products, and services related to sustainable transportation. Included in its development portfolio is an electric sport utility vehicle (SUV) and a pickup truck, both of which are expected to appear in 2020. These new vehicles, expected to retail around $69,000, will feature four electric motors, air suspension systems and a per-charge range potentially as high as 400 miles.
As well as electric vehicles, the company is working on vehicles that are capable of semi-autonomous operation that will be suitable for on-road and off-road driving.
The future is electric
Commenting on the deal, with a nod to an increasingly competitive space, Michael Thomas Staiger, research analyst at Odeon Capital Group said: “There’s a big push by the entire industry to make electric vehicles and there’s a lot of competition downstream, so there will be a lot of choices for consumers.”
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As well as a desire to get to market quickly, these types of deals reflect the need, even by big established firms, to share the huge capital costs of developing electric vehicles. There is also big money to be made by betting on electric cars. Despite the ubiquitous nature of Ford cars, Tesla’s market value is valued higher at around $45 billion, while Ford’s market cap is closer to $38 billion.
